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Strategy Briefing
Pharmaceuticals: Pricing Pressures Become New Normal
Jan 2018
US$1,325Added to Cart
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About This Report
New Report Guarantee
If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!
Drug prices in developed markets will remain under pressure, in line with government-mandated initiatives, expected patent losses, and rising generic penetration. The key players are already losing their profits and thus ramp up advertising budgets and shift towards externalising R&D activities. However, in the longer run, companies can focus on caring for older consumers, and employing new technology either to reduce their manufacturing costs or to improve their products. .
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Overview
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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.
Pharmaceutical pricing pressures will continue
Pharmaceutical manufacturers will continue to face public sector regulatory pricing pressures, as governments aim to contain rising budget deficits. In addition, companies’ profit margins are expected to be negatively affected by expected patent losses. Finally, generic drug consumption and manufacturing is expected to intensify putting further pressure on drug prices.
Companies are expected to continue increasing spending on advertising
As a direct consequence of intensifying pricing pressures, companies witnessed shrinking profit margins. As a result, pharmaceutical makers ramped up their advertising budgets to shield themselves from potential revenue losses. Some, however, maintained substantial investments in R&D hoping to develop the next blockbuster drug.
M&As are set to continue
Although M&As somewhat slowed down in 2016, deal-making is expected to remain strong in the near future. This is partly due to the players’ strategic pursuit to externalise R&D. In addition, companies are increasingly willing to buy out innovation at an earlier stage of development.
Ageing populations ensure ongoing demand growth
Ageing populations in developed countries are expected to ensure continuous growth in demand for higher cost pharmaceuticals. As a result, biologics is set to be among the most lucrative drug sectors, with the greatest demand for oncology, diabetes, and rheumatoid arthritis treatments.
Technology to offer cost-saving opportunities
Pharmaceutical manufacturers can gain from Industry 4 solutions, as new technologies will provide significant production savings.
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Introduction
Scope
Key findings
Pharmaceutical prices lag behind inflation
Pharmaceutical Pricing Pressures
Future factors forcing down drug prices
R egulatory pricing pressures are set to continue
Governments to launch new pricing policies in upcoming years
harmaceutical Pricing Pressures
Company revenues negatively affected by patent losses
Generic and biosimilar consumption is expected to intensify
Biologics competition will intensify with new Asian entrants
Consequences of Lower Price Environment
Consequences of pricing pressures
Pricing pressures to result in shrinking profit margins
R &D-motivated M&As are anticipated to pick up
Companies move towards externalising R&D
Contract manufacturers set to gain from pursuit of externalising R&D
Innovation is shifting towards small companies and universities
Innovation increasingly originates in universities
Players are to continue ramping up advertising spending
Opportunities: What Can Companies Do?
Opportunities: What can companies do?
Growth opportunities in the care for elderly
Non-communicable diseases to drive pharmaceutical consumption
Gaining benefits from underserved areas such as Alzheimer’s
Biologics to provide significant revenue gains
New players to bring turbulence to highly-valued biologics market
Industry 4 solutions to reduce production costs
Industry can gain from employing strategic supply chain solutions
Continuous manufacturing: Way to reduce costs
Convergence of pharmaceutical and technology sectors
Pharmaceuticals gain from merging with technology
Conclusion
Key takeaways
Why buy this report?
Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.